Despite the abrupt emergence of biofuels, little is known about how they will affect human wellbeing – especially the welfare of the most vulnerable groups, such as the poor populations. In order to understand the pathways of impact through which biofuels ultimately affects human well-being, a well-framed and theoretically-consistent quantitative framework is needed, which accounts for both market-level interactions, as well as micro-level adjustments to shocks that imposed on local economies as well as to eradicate the generally conceived conflict between ‘Fuel verses Food’ controversy.

The present study has attempted to derive a market driven mechanism to biofuel proliferation in Haryana, a state of India; under the sectoral scope of Land Use, Land Use Change and Forestry [LULUCF] of Clean Development Mechanism [CDM], which could be implemented under the Article 12 of Kyoto Protocol to sustainable development and equitable development of poverty driven population of agrarian societies. The paper has highlighted that the degraded and waste lands of marginal or progressive farmers would be planted under biofuel crops, Viz., Jatropha sp. and Pongomia sp., which could have been left ‘unutilized’ without this CDM intervention. The opportunity cost of these lands would be zero and farmers would be obtaining carbon revenue through this plantation activity. Eventually, the lands would be converted to fertile stage, through the soil reclamation practices under the biofuel plantation activities, and farmers could use it for conventional agriculture practices. The resultant of this approach would be poverty alleviation and income generation of the marginal and small farmers. The paper has also established through correlation and regression analysis that with biofuel cultivation soil fertility could be enhanced and there is a positive correlation between poverty alleviation and CDM based biofuel planation activities. The paper also establishes that under CDM- ‘Food verses Fuel’ notion is a myth.

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